Estate, Powers and Trusts, § 5-3.1: Exemption For Benefit of Family

Those who make wills, referred to as testators, generally are free to leave their property to whomever they want. This is one of the most attractive benefits of making a last will and testament. A will allows the testator to remain in control over what happens to his (or her) property after he passes away. While testators do have a great deal of control over the terms in their wills, there are some restrictions. New York has an interest in ensuring that the immediate family of testators are financially protected. Thus, under Estate, Powers and Trusts, § 5-3.1 Exemption for benefit of family, the surviving spouse and children under the age of 21 are entitled to specific property from a testator’s estate regardless of what the will says. To learn more about the exemption for benefit of family and any other restrictions under New York estate law, contact a New York estate lawyer who understands the intricacies of New York estate law.

Regardless of what a testator’s will says, if a decedent dies leaving a surviving spouse or children under the age of 21 certain, under Estate, Powers and Trusts, § 5-3.1 Exemption for benefit of family, certain property passes to him or her by. That property includes:

• Household utensils, musical instruments, jewelry, furniture and appliances
• Family bible, family pictures, and other family items such as books computer discs, DVDs, videotapes, and audiotapes
• Domestic and farm animals and their food
• Farm machinery
• One vehicle with a fair market value of no more than $25,000
• Money in bank account or other financial account not exceeding $25,000

As a New York estate lawyer will explain, the items listed in Estate, Powers and Trusts, § 5-3.1 Exemption for benefit of family, pass to the surviving spouse or children immediately. The family does not have to wait for probate which takes at least 7 months.

Another protection for the surviving spouse is referred to as the “right of election.” New York estate law is very specific in its protection of the inheritance rights of a spouse. Under Estates, Powers and Trusts, § 5-1.1-A, Right of election by surviving spouse, a spouse is entitled to an "elective share" of the assets. The elective share is the greater of $50,000 or 1/3 of the estate.

The immediate family is protected not only in cases where the decedent left a will, but also in case were a decedent passed away intestate. Under New York’s laws related to intestate succession, the surviving spouse and children are considered a decedent’s next of kin, and, as a result, are entitled to receive the decedent’s entire estate as follows:

• Surviving spouse: If the decedent leaves a surviving spouse, but no children (or grandchildren), then the surviving spouse receives the entire estate.
• Children, no surviving spouse: If the decedent leaves children, but no surviving spouse, then the children are entitled to receive the entire estate, divided equally. Adopted children are treated in the same way as biological children, while foster children and stepchildren are not entitled to an intestate share.
• Surviving spouse and children: If the decedent leaves both a surviving spouse and children, then the surviving spouse receives the first $50,000 of the estate, plus 50% of the remaining estate. The children receive the remaining 50% of the estate.

Property that is subject to spousal exemption, spousal right of election, and intestacy, is property that is not part of the probate estate. Examples of such property include:

• Living trust: Property transferred to a trust during the decedent’s lifetime
• Life insurance proceeds. Life insurance proceeds go to the designated beneficiary
• Retirement accounts. Funds in an IRA, 401(k), or other retirement accounts go to the designated beneficiary
• Transfer on death (TOD) accounts. Securities held in a transfer-on-death account go to the designated transferee
• Payable on death (POD) accounts. Money in a payable-on-death account go to the designated transferee
• Joint tenancy property. Real estate or other property you own with someone else in joint tenancy

As an estate lawyer in New York will explain, these non-probate assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will. Why oftentimes the co-owner or beneficiary is the spouse or child, sometimes it is someone else.

1. Right of election by surviving spouse: Estates, Powers and Trusts, § 5-1.1-A
2. Descent and distribution of a decedent's estate: Estates, Powers and Trusts, § 4-1.1

(a) If a person dies, leaving a surviving spouse or children under the age of twenty-one years, the following items of property are not assets of the estate but vest in, and shall be set off to such surviving spouse, unless disqualified, under 5-1.2, from taking an elective or distributive share of the decedent's estate.  In case there is no surviving spouse or such spouse, if surviving, is disqualified, such items of property vest in, and shall be set off to the decedent's children under the age of twenty-one years:

(1) All housekeeping utensils, musical instruments, sewing machine, jewelry unless disposed of in the will, clothing of the decedent, household furniture and appliances, electronic and photographic devices, and fuel for personal use, not exceeding in aggregate value twenty thousand dollars.  This subparagraph shall not include items used exclusively for business purposes.

(2) The family bible or other religious books, family pictures, books, computer tapes, discs and software, DVDs, CDs, audio tapes, record albums, and other electronic storage devices, including but not limited to videotapes, used by such family, not exceeding in value two thousand five hundred dollars.

(3) Domestic and farm animals with their necessary food for sixty days, farm machinery, one tractor and one lawn tractor, not exceeding in aggregate value twenty thousand dollars.

(4) The surviving spouse or decedent's children may acquire items referred to in subparagraphs (1), (2) and (3) of this paragraph, in excess of the values set forth in such subparagraphs by payment to the estate of the amount by which the value of the items acquired exceeds the amounts set forth in such subparagraphs.  If any item so acquired by the spouse or children of the decedent was a specific legacy in decedent's will, the payment to the estate for such item shall vest in the specific legatee.

(5) One motor vehicle not exceeding in value twenty-five thousand dollars.  In the alternative, if the decedent shall have been the owner of onee or more motor vehicles each of which exceed twenty-five thousand dollars in value, the surviving spouse or decedent's children may acquire one such motor vehicle from the estate, regardless of the fact that the decedent may also have been the owner of another motor vehicle of lesser value than twenty-five thousand dollars, by payment to the estate of the amount by which the value of the motor vehicle exceeds twenty-five thousand dollars;  in lieu of receiving such motor vehicle, the surviving spouse or children may elect to receive in cash an amount equal to the value of the motor vehicle, not to exceed twenty-five thousand dollars.  If any motor vehicle so acquired by the spouse or children of the decedent was a specific legacy in decedent's will, the payment to the estate of the amount by which the value of the motor vehicle exceeds twenty-five thousand dollars shall vest in the specific legatee.

(6) Money including but not limited to cash, checking, savings and money market accounts, certificates of deposit or equivalents thereof, and marketable securities, not exceeding in value twenty-five thousand dollars, reduced by the excess value, if any, of acquired items referred to in subparagraphs (1), (2), (3) and (5) of this paragraph.  However, where assets are insufficient to pay the reasonable funeral expenses of the decedent, the personal representative must first apply such money to defray any deficiency in such expenses.

(7) Any set off to a child under the age of twenty-one years not exceeding ten thousand dollars shall be covered by the provisions of § twenty-two hundred twenty of the surrogate's court procedure act as if the child were a beneficiary of the estate.  Any excess amounts shall be governed by the guardianship statute, if applicable.

(8) The court shall have the authority to issue such documentation as necessary to effectuate the transfer of any items under this §.

(b) No allowance shall be made in money or other property if the items of property described in subparagraph (1), (2), (3) or (5) of paragraph (a) are not in existence when the decedent dies.

(c) The items of property, set off as provided in paragraph (a), shall, at least to the extent thereof, be deemed reasonably required for the support of the surviving spouse or children under the age of twenty-one years of the decedent during the settlement of the estate.

(d) As used in this §, the term “value” shall refer to the fair market value of each item, reduced by all outstanding security interests or other encumbrances affecting the decedent's ownership of said item.

If you have questions or concerns about family rights to estate property, discuss your concerns with an experienced estate lawyer serving New York. The attorneys at the Law Offices of Stephen Bilkis & Associates have years of experience successfully representing clients in complex estate matters and estate litigation. We are here to help. Contact us at 800-696-9529 to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Nassau County, Suffolk County, Westchester County, Bronx, Brooklyn, Long Island, Manhattan, Queens, and Staten Island.